This invention is concerned with a microbial process for the production of optically active .gamma.-decalactone. Considerable time and effort have been expended by microbiologists in the search for better processes for the production of optically active lactones. U.S. Pat. No. 3,076,750 disclose a method of preparing certain optically active lactones and the corresponding hydroxycarboxylic acids by microbial reduction of ketocarboxylic acids. The metabolism of ricinoleic acid by some Candida strains was investigated by Okui et al. (J. Biochemistry, 54,536-540, 1963) who showed that .gamma.- hydroxydecanoic acid was an intermediate in the oxidative degradation of ricinoleic acid. However, only trace amounts of .gamma.-hydroxydecanoic acid were recovered from the fermentation medium due to the metabolysis of .gamma.-hydroxydecanoic acid upon completion of the fermentation, and the toxicity of ricinoleic acid to the microorganism, which limits the amount of substrate that can be used.